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  • ALCX Rewards Idea - Liquidity Mining Incentives

Has there ever been discussion around providing ALCX liquidity incentives that reward those who deposit Dai (and soon to be ETH) into the protocol itself? It's important for the long-term sustainability of the protocol to continue growing its deposit base, and a way to continue bootstrapping it is to provide rewards for those who deposit. It's a cost effective UA strategy to bring even more users to the protocol while also boosting earned Yearn affiliate fees as deposits grow.

I also think rewards will temporarily offset the yield compression we've seen these past few weeks. This is more of a short-term benefit and therefore less important in my opinion. But a nice added benefit nonetheless.

I understand the argumentation behind this, but I don't believe the current vaults need incentivization. Every time the debt limit is increased for the alUSD vault it's usually gone within days; the debt limit for the original alETH vault was reached in like 3 hours. So right now incentivization of the vaults makes little sense because we don't have a demand issue, but rather a supply issue (if you will).

Incentivization of the vaults might help to distribute ALCX to a wider range of users, but I'm not sure if that is a priority at the current stage of the protocol. Might be a good thing to implement this idea at a more mature stage though (as Aave for example did).

The major part we're working on is to get good usecases for our assets, be that alUSD, alETH or ALCX, outside of the Alchemix platform. Once that's done I'm sure we can focus on doing more shenanigans.

    14 days later

    n4n0 have you guys ever looked at Centrifuge's Tinlake product for potential alUSD use cases? They're trying to bridge the gap between real world assets and DeFi and they have some type of partnership with Maker to provide Dai loans backed by real world collateral (e.g. real estate, trade receivables, payment advances, etc.). I could see some potential use cases for Alchemix, particularly on the 12-24 month real estate bridge loans. Check out their Tinlake app at https://tinlake.centrifuge.io/.

    It's a bit different than the standard use cases we see like the D4 pool, but it's potentially a niche worth exploring. I admittedly need to learn more about Centrifuge.

    • n4n0 replied to this.
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